NO MASSIVE FDI OUTFLOW DESPITE GLOBAL FINANCIAL CRISIS

KUALA LUMPUR, Oct 20 (Bernama) -- There is no massive outflow of foreign direct
investments (FDIs) despite the global financial crisis, said Minister in the
Prime Minister's Department Amirsham Abdul Aziz.

He said the FDIs that flowed out were more of short-term portfolio
funds
which typically moved from one location to another.

"We still gain in FDIs," he told a press conference on the sidelines of the
Malaysian Institute of Certified Public Accountants (MICPA)-Bursa Malaysia
Business Forum 2008.

To a question if Khazanah Nasional Bhd, the government investment arm, is
buying under-valued assets, Amirsham said: "We will leave it to the market. We
will not interfere in terms of investment decisions of institutions such as EPF
and PNB."

"They are professionally managed and can smell opportunities and pounce on
them when the valuation is right," he said.

He said the government will announce packages to ensure the stock market
continue to be attractive and highlight opportunities to investors.

"While there may be valuation contraction in terms of stock market, there
is no reason to panic as the banking system is strong enough to withstand
current financial crisis," he said.

Amirsham said there are various mechanism to ensure stability in the
liquidity system and that banks continue to make credit available and
able to lend money.

"Focus will be on making credits available to small-and medium-scale
enterprises," said the former president and chief executive officer of
Malayan Banking Bhd, Malaysia's largest banking group.

On the economic outlook next year, Amirsham said while there are
expectations of a contraction in terms of export, domestic spending will remain
strong and powerful.

"We expect some slowdown. We have budgetary process to ensure domestic
spending and investment will continue to keep the economy going," he said.

There are also various contingency plans should there be any
retrenchment, he said.

"We do expect lay-offs from Singapore of some Malaysians working in the
republic as the city-state is going through a technical recession.

"Some funding will be pumped in to ensure the workforce learn new skills
and be absorbed into the economy.

"The social safety net will also be used substantially to help the
low-income group," he said.

Amirsham said the government announced Monday the stabilisation plan to
address immediate term issues and to shore up consumer and investor confidence.

"The direct impact from the global financial turmoil on the Malaysian
economy will most likely be limited, given that Malaysian banks and financial
institutions have minimal exposure to the U.S. subprime issue and other assets
as well as to the failed financial institutions in the U.S. and Europe," he
said.

"We need to ensure people don't panic unnecessarily," he added.

-- BERNAMA